Posted by: karisyd | November 25, 2013

Models for Omnichannel retail

As a keen observer of the Australian digital commerce space it strikes me that many of the issues and conversations that make headlines today, have been discussed in Europe about a decade ago.

A case in point is omnichannel retailing. Sure, it was called multichanneling at the time and it didn’t include the mobile channel (or not seriously, remember WAP?).

So, I went back to my old slide sets and discovered some useful slides that I had used with my colleague Carsten Totz in 2001 in a course on e-commerce at Muenster University. With some tweaking and updating they allowed me to create the following framework with models for implementing omnichannel strategies, which represent different stages of maturity.

omnichannel-models

Model 1: Channel choice

Under this model the retailer provides new online and mobile channels as largely separate offerings in addition to traditional store (or catalogue-based) retail.

While customers might use the channels interchangeably for information, under this model pricing and transactional aspects are managed independently. Some retailers also opt to set up separate entities that use their own branding.

Such strategies are often implemented in reaction to fears of cannibalization or push back from local franchisees, when the centre tries to implement an online strategy.

Model 2: Channel coordination

This model is more complex but also more customer-oriented, as the retailer allows customers to carry out different steps in the transaction process in different channels.

This allows “channel hopping”, whereby customers can buy online and pickup in the store, or use the store to try and buy, while the merchandise is delivered home.

channel-hopping

Implementing such a strategy requires treating the online channel as an integral component of the retail strategy and data integration between the channels, which can be time-consuming and expensive depending on the nature of legacy systems.

Model 3: Channel blending

Channel blending aims to truly integrate channels. In fact, this model moves away from traditional “channel thinking”. It promotes rethinking the retail experience from the customer perspective. What might be treated as channels today will become components in an integrated customer retail experience design in the future.

The potential for this kind of innovation can be seen in Apple’s retail offering. Its online shop and iTunes-based fulfillment process are integral parts of the customer’s in-store experience.

The Apple Store App allows scanning of in-store items, which not only allows customers to see detailed information on a product, but also to pay and leave the store by presenting the receipt on the phone screen at the store exit.

Rethinking the role of mobile and online offerings opens up a creative space for retail innovation. In the future, traditional retail spaces might morph into showrooms for organizing product experiences, rather than being oriented – process and layout-wise – around the transaction process.

As a first step, mobile apps could be used to create in-store wish lists, share experiences with friends, organise lay-by and pay, while gradually allowing blended experiences, for instance, through avatar-based consultations or augmented reality solutions.

Omnichanneling in Australia is still in its infancy. This can best be seen by our large department stores recently reporting on the progress in creating their online offerings. While this provides stepping stones in creating a channel coordination model, the current status quo is years away from resembling a blended model.

Posted by: karisyd | November 15, 2013

Treating technology as infrastructure

In this talk, given at DISRUPT.SYDNEY on 5 September 2013, I contrast the dominant tool view of technology with what I term an infrastructure view. The dominant tool view treats technology as a solution for a problem. Technology has a distinct purpose and serves a need. My argument is that we quite naturally assume this view as it fits with the management orthodoxy of justifying investments through business cases. However, this narrow view of technology obscures the view of the enabling nature of technology in supporting uses that are fundamentally unknowable prior to making investment decisions. A tool view thus hinders innovating with technology as it results in conservative rather than forward-thinking decision.

Posted by: karisyd | August 12, 2013

Value and prospect of the NBN

Key to understanding the value and prospect of the Australian National Broadband Network (NBN) is to appreciate the nature of infrastructure technologies, which I have written about previously (e.g. see here).

The Sydney Morning Herald was kind enough to allow me to express some of these ideas in an opinion piece today.

In addition here is a short video in which I argue along those same lines:

Posted by: karisyd | August 1, 2013

ESN group types

As part of our latest study on Enterprise Social Networking we have looked into communication in groups. In our case study on Yammer at Deloitte Australia we have analysed communication in the thirteen most prolific groups, coded communication threads and carried out a cluster analysis to identify different types of groups. For the full analysis please download the full report.

We found four types of groups (see also figure below):

  1. Conversational groups (‘virtual water coolers’) contain a large share of threads in which individuals come together and discuss a certain topic. Therefore, threads are slightly longer compared to the other group types. While a variety of topics are covered, most of them are in some way work-related or specific to the case organisation. We conclude that this archetype resembles a form of ‘virtual water cooler’, where people meet to discuss a broad range of topical work-related issues with intermissions of the occasional non-work related discussion.
  2. Solution-oriented groups (‘innovation hot spots’) are characterised by lengthy conversations with a focus on problem-solving. Typically, users post a problem with related information and others reply, presenting their point of view of a possible solution or providing additional information that might be helpful. In addition users focus on innovation topics that are not directly related to the participants’ daily work, but due to the high interest in such topics, many people engage and provide new input, enabling to innovate on both internal processes or external markets and products.
  3. People-centred crowdsourcing groups (‘networks of expertise’) have ‘Idea generation’ as a distinctive characteristic. While ideas are not always actually generated on Yammer, discussants often contribute contact details of colleagues for others to seek their expert advice. Overall, we perceived that the more complex the topic, less idea generation takes place on the platform, but is met with useful references to colleagues.
  4. Information sharing groups (‘information streams’) are places for participants to share information of different kind, such as links to external web pages, figures, videos, animations and audio files. Participants post new and useful information for their colleagues. Content however is often not discussed or commented further, but sometimes enriched by context information.

Notably, all groups show a certain amount of information sharing. We assume that all group types tend to evolve from this initial archetype.

group-types

Reference

Riemer, K, Tavakoli, A (2013) The role of groups as local context in large Enterprise Social Networks: A Case Study of Yammer at Deloitte Australia, BIS Working Paper series BIS-WP2013-01.

Posted by: karisyd | July 30, 2013

Groups in Enterprise Social Networks

We have recently published our latest study into Enterprise Social Networking, this time looking at how communication proliferates at the micro-level with a focus on the role of groups in large ESNs. While you can download the full report below, I wanted to share some of the findings here (more to come over the next days).

One thing we did in our study (which again is based on the Yammer network of Deloitte Australia) is compare communication threads in the ‘All network’ stream with those in a select number of well frequented groups in the network. The main outcome of this comparison is summarised in the following figure:

groups

Download the full report here:

Riemer, K, Tavakoli, A (2013) The role of groups as local context in large Enterprise Social Networks: A Case Study of Yammer at Deloitte Australia, BIS Working Paper series BIS-WP2013-01.

Posted by: karisyd | June 12, 2013

Understanding design from the user end

In a guest piece in the Sydney Morning Herald, Slate writer Farhad Manjoo argues that “Apple needs to do more than just change the iPhone design“. Quite surprisingly he equates design narrowly with the aesthetics of the device, arguing that when Apple “hits a bump in the road, its instinct is to rejig how its products look”.

I would like to respond to what I think is a misunderstanding for the nature of design in general and the design of end user devices in particular.

1) The first and most obvious misunderstanding is to equate design with aesthetics, the cosmetic side of design (what the thing looks like). Apple, its chief designer Jon Ivy and Steve Jobs in his day have argued at numerous occasions that design is much more and runs much deeper than just the cosmetic surface of a product.

Good design imagines new devices in their (yet-to-be-created) use contexts. In essence, design is about changing the world. It is about imagining new practices and make these happen by creating devices that are radically usable. This is what Apple does best. Apple is in the business of changing our world – great devices are the means for doing it (and they make lots of money in the process, because they are good at it). This is what the iPhone and iPad have done, they have changed how we communicate, work, compose music, serve our clients, how we play games, review academic papers, you name it.

2) However, the more significant misunderstanding is that we (as people who enjoy dealing with technology) extrapolate our own relationship with technology to the user. While geeks, technology commentators and all those people whose business is technology per se will naturally see devices as things with features, users normally don’t! This is an important point and not a trivial one. We have written about this in more depth elsewhere.

In essence, for users when devices are fully adopted and work properly they move into the background, they withdraw from experience, they are not things to be manipulated but rather a transparent means for doing stuff. This does not mean that I cannot look at it as a thing, but for it to function most effectively it needs to get out of the way.

When I work on the computer and I am absorbed in writing a text, all hardware and software should just get out of the way, it should inconspicuously function and let me do what I am doing. When working at our best we are in automatic mode, our body deals with the device while we can concentrate on the task. This is why I enjoy my Mac, it gets out of the way, it does not intrude on my tasks in the same way Windows used to do. The same applies to the iPhone or iPad.

End user devices should just work and make themselves invisible whenever we are surfing the web, tweeting, doing our banking or whatever else we’re doing with these devices. The device and app should simply be invisible if everything goes well. Apple makes this its goal, and it achieves this quite well in my view (it is an extra perk that the thing really looks good if I choose to bring it into view and marvel at its slick aesthetics). We know that Apple does this quite well, because Apple users are much more active than Android users in any possible usage statistic available (they spend more time on their devices, buy more, browse the Internet more etc).

Good design withdraws from experience and lets me do my stuff.

Once we understand this phenomenon, we can see why any radical redesign of the iOS operating system at this point in time would really be a bad idea! As a geek, I would probably enjoy indulging in its newness, but as a user it would disrupt my flow. I would have to deal with the changes, I would have to re-learn. Users don’t want to learn devices, they want to use them. That is why evolutionary changes, step by step, improvements here and there, in easily digestible portions will just do the trick for most of us (users). No geek or tech commentator gets excited by this (they want new features, new UI, bold changes), but it works for the user. I am glad Apple understands this and keeps it that way.

When Apple wants to be bold they create a new device category, a new market, a new ecosystem, in short they change the world. But applying revolutionary changing to an already existing (and working!) ecosystem is really not a good idea.

Posted by: karisyd | May 14, 2013

Social or not?

Recently, I have again been irritated by a couple of blog posts about the problems that the term “social” seems to create when used in a business context. Here is my (polite) rant on the topic:

There seems to be a problem with the word social in particular when one wants to convince executives of the benefits of Enterprise Social Media.

Social it seems raises red flags in that any social business initiative is suspected to be a scheme for avoiding work and procrastination.

To address the problem it has been suggested to replace the term “social” with “network”, “open”, “collaboration” or avoid it altogether (e.g. to talk about Enterprise Collaboration Networks or just Enterprise Networks).

Frankly, I find these suggestions bizarre and dangerous. Since when is the term social considered anti-business or even taken to be a swear word?

A quick look at Wikipedia confirms that social is a pretty innocent term. Depending on  context the term refers to:

  • The collective co-existence with others.
  • An objectively given fact characterising humans as inherently social beings.
  • Attitudes or behaviours displayed by people when they take account of the interests or needs of other people.

Hence, social either means just being with other people, or to behave unselfishly taking others into account. At no point does it say that social might be the opposite to terms such as “working effectively”, “doing business” or “being rational”. If anything the opposite of social is selfish, acting with no regard for other people.

If social behavior means to take the needs of others into account how can this be regarded negative in the workplace? And what does it say about a person if they think that is to be avoided and has no place in business.

On the contrary, isn’t all business necessarily and by definition social?

So, should we avoid the term? – No! Of course not.

Will that make it harder to sell the idea of social business to (some!) executives?  – Maybe.

But in my view it is dangerous to give in to an overly reductionist management attitude that tries to free all business matters of “social” aspects and reduce it to rationalistic task execution. This needs to be resisted in my view. Not (only) because it is the right thing to do, but because it is good for business.

The whole point of the recent push for social business is to recognize that work in a modern knowledge economy has as much to do with effective task execution as it has with engaging in ongoing conversations and sense-making with others about the work we are engaging in together. How else can the organization innovate, change, adapt and evolve with the changes that go on around us in an economy that is being disrupted by the emergence of a stream of new digital technologies?

It is precisely in the vision of initiatives such as ESN to point out that overly reductionist approaches to management and work are not suited to cope with the demands of digital change.

So, my argument is that if we avoid the term social we are complying with the rules of the very game we need to change.

What we should do is educating people about the social nature of business, not pretending it’s not. Recognising that all business is social is an attitude, a state of mind that is a prerequisite for success in our changing economy.

But there is still hope. It might well be that being cautious about social when approaching executives is more a reflex anticipating resistance than a reflection of actual management attitudes. I know many managers and executives who are well aware of the need to engage with social business, their questions often naturally revolve more around the ‘how’ not the ‘if’.

Posted by: karisyd | March 7, 2013

Digital Disruption

Co-authored by Kai Riemer and Robert B. Johnston

What is Digital Disruption?

Digital disruption refers to changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking.

Digital Disruption can be seen as both a threat and an opportunity:

  • ICT-induced change happens at a pace and scale that impacts on existing business practice in disruptive ways, threatening and invalidating existing business models.
  • Digital technologies offer new opportunities for the creation of innovate business models for entrepreneurs to compete with established business practices in a wide range of industries.

Digital Disruption can occur on various levels:

  1. Disruptions to individual life practices (example: Mobile connectivity disrupts established work-life boundaries)
  2. Disruptions to work practices (example: Narrating work via microblogging in the workplace changes what counts as (valuable) work)
  3. Disruptions to business practices (example: Workplace social media disrupts the way information travels in the organisation and induces shifts in power relationships)
  4. Disruptions to industry structures (example: Digitisation of media content and user-generated content disrupts traditional value chains of content production and delivery)
  5. Disruptions to societal systems (example: Social media participation disrupts traditional practices of public opinion making)

While the above examples point to profound changes to established business practices, they do not fully illustrate what exactly makes these changes truly disruptive.

In the following we will outline our thoughts on the topic.

What is disruptive about digital change?

Our observation is that disruptive change is change that disrupts our understanding of the world.

Digital disruption changes the basis on which we make sense of, give meaning to and understand our business and work-life practices.

An example might illustrate this. The emergence of devices such as the iPad has changed fundamentally not only how we consume data and documents, how we communicate, how we learn and how we perform various business practices but also more fundamentally our understanding of what a computer or phone is, what counts as a workplace, or what an appropriate business meeting looks like. In consequence it has also brought about new professional identities such as that of the modern tech-savvy road warrior manager.

The nature and magnitude of these changes was hardly predictable when the iPad was released (it is worth googling and reading the commentary at the time). Rather, they are the result of continuous social sense-making and adaption processes.

We argue that digital disruption does not simply change markets, or present innovative business ideas (although that is one result).

Digital disruption is not merely the digitisation of an existing business model or the replacement with a digital alternative, such as putting University lecture content online or selling products through online shops. This is a far too limited understanding.

How to understand Digital Disruption?

Disruptive change cannot be grasped by merely extrapolating into the future what we know today. Such an attempt at forecasting leaves out that actors within traditional business practices innovate using digital technologies, they do not merely stand still and wait to be disrupted by some mysterious force.

More importantly, as these business practices change so does our understanding of what counts as meaningful, valuable, and the right way of performing these business practices, which brings about further changes.

Consequently, the main argument is that some digital innovations disrupt the very basis on which we understand the concepts by which any extrapolations into the future are made, such as ‘business value’, ‘communication’, ‘what counts as a transaction or content or a product’, ‘ ways of working’, ‘what counts as a workplace’ and so on.

Forecasting the impact of digital disruption becomes impossible when the disruption occurs to the very basis on which we create a predictive model. When what counts as a fact changes, any attempt to build a prediction on the known facts of today will fail. All data collection, even big data, involves some data selection and interpretations which are always based on these notions of self-evident fact.

What can we do then?

What is needed instead is a better understanding of how to cope with and shape disruption, how to engage in productive sense-making processes in order to advance our understanding of industry processes, business value etc. and thus to innovate and adapt as digital disruption unfolds within a particular sector or industry.

As a consequence, we need more:

  1. foundational research into the particular nature and structure of disruptive change processes and
  2. applied research initiatives as part of an ongoing sense-making and adaption process in order to shape the disruptive processes as they occur in particular sectors and industries.
Posted by: karisyd | December 12, 2012

The S.O.C.I.A.L. framework: ESN use cases

Our latest study has just been released (with @arimue). From an analysis of five Enterprise Social Networking cases we have identified a comprehensive catalogue of ESN use cases and integrated them into a framework. We hope that this S.O.C.I.A.L. framework will not only provide a good overview of emergent ESN benefits, but also illustrate the variety of potential ESN uses in a catchy way!

social-framework-final

For the full report, which includes a table with detailed use case descriptions, as well as case scenarios and data from the cases please download the full report as pdf here (pdf at bottom of the page):

Riemer, K; Richter, A. (2012): S.O.C.I.A.L. – Emergent Enterprise Social Networking Use Cases: A Multi Case Study Comparison, BIS Working Paper, The University of Sydney.

Posted by: karisyd | October 25, 2012

Flatter hierarchies? Or more transparent networks?

It seems like a taken-for-granted wisdom now that we speak of the “flattening of hierarchies” when we talk about Enterprise Social Networking (ESN). The simplified argument goes something like the following: “With ESN anyone in the organisation can have a say, which shifts the way influence and power in the organisation operates. Hierarchies become obsolete, because power in this new world stems from knowledge and contribution, not from a place in the hierarchy”.

But this line of reasoning has two main problems in my view: 1) it uses a straw man argument, 2) it applies a limited understanding of hierarchies.

1) The straw man argument

The argument assumes that traditionally (before ESN) power, communication and information flows in organisations would operate along hierarchical command chains. Quite obviously however for most organisations this is not true anyway. Rather, social networks and personal relationships have always been the source of information and power for individuals in organisations.

The role of ESN: What changes with the proliferation of ESN however is that it creates new social networks that have the power to by-pass the networks of old. ESN creates transparency, allows information to flow more freely and it brings to the fore the actual contributors of ideas and new knowledge. This in turn shifts the power between those that have ideas and those which were formerly able to control the (intransparent) social network, to appropriate ideas or use information as a scarce resource.

2) Limited understanding of the role of hierarchy

Hierarchies are often seen as a stand-in for top-down power and the chain of command in decision making and execution. However, hierarchies in organisations have a much more important function than that. Hierarchies give people something to aspire, they are part of our natural progression in our jobs “up the latter”. They exert an important motivational function. And most managers understand anyway that control and power are a tad more complex than the limited top-down stereotype.

The role of ESN: However, ESN allows people to become much more aware of each other. Across the hierarchy, but also horizontally across organisational functions (the silos). Information thus traverses the hierarchy much more freely.

Consequently, a fully adopted ESN might ‘devalue’ the intransparent behind-the-scenes social networks that allowed well-connected individuals to exploit their broker position within network. Where these individuals might have been able to collect, appropriate, and selectively withhold and spoon-feed their information previously, with ESN it becomes much more transparent who has got the good ideas and something to contribute.

Hence, ESN does not really devalue the concept of organisational hierarchy – hierarchies are here to stay, someone needs to be in charge after all, and we all aspire that next promotion – but it has the tendency to devalue the shadow networks that operate in the background. And that might not be such a bad thing.

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